Weekly Highlights

• Yields on 91-Day and 182-Day T-Bill trimmed.
• GSE ended all four trading weeks in January on a positive note.
• Ghana cedi outmuscled the US dollar to nullify all losses.
• Wallstreet dipped to its lowest in 4 months, as effectiveness of a newly developed vaccine appears unsatisfactory.
• Gold surged as downbeat US growth data caused investors to fly to safety.

Macroeconomic update
Key Ghana Economic Data

Indicator 2017 2018 2019 2020 2020
Target Actual
Inflation CPI (y-o-y %) 11.8 9.40 7.90 11.1 10.40
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 7.00
Monetary Policy Rate (%) 20.0 17.0 16.00 n/a 14.50
GDP Growth (y-o-y %) 8.5 6.3 6.5 0.9 -1.1 Q3
Budget Deficit (% of GDP 5.9 3.8 4.5Sep 7.2 7.9
Public Debt (% of GDP) 69.8 57.6 63.00 n/a 68.3
Fx. Reserves (M. Cover) 4.3 3.7 4.1 ?4.0 4.0
Source: BOG; MOFEP; GSS. * represents provisional estimate ** data yet to be released by MoF

Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Feb 01 – 05 14.06 14.09 16.96 18.50 19.25 19.85
Jan 25 – 29 14.08 14.13 16.95 18.50 19.25 19.85
Jan 18 – 22 14.09 14.14 16.96 18.50 19.25 19.85
2021 Yr. Open 14.09 14.12 17.00 18.50 19.25 19.85
NB: The above are the annual yields on Government of Ghana Treasury Securities.

Interest rates on the short-dated treasury securities eased marginally. The yield on the 91-Day T-Bill dropped by 2 basis points to settle at 14.06 percent. The yield on the 182-Day T-Bill also moderated by 4 basis points to 14.09 percent but that on the 364-Day T-Bill inched up by a basis point to settle at 16.96 percent. Yields on the Government treasury Notes and Bonds, however, remained unchanged as they were not part of the week’s auction.

Results of Auction held on 29th January, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,096.39 431.15 14.0586
182-Day T-Bill 193.31 193.31 14.0927
364-Day T-Bill 603.25 596.65 16.9596

A total of GHS1,221.11 million was raised by the Government at the week’s auction out of GHS1,892.92 million tendered by the investors. This fell below the week’s target of GHS1.13 billion with the 364-Day T-Bill dominating with a percentage share of 48.86. It is in the expectation of the Government to raise a total of GHS856.00 million at the upcoming auction through the sale of the 91-Day, 182-Day, and 364-Day T-Bills.

Following the marginal adjustment in yields on treasury securities, the yield curve sustained its normality. This comes on the back of continue investor confidence and appetite in doing busines in the country despite the COVID-19 pandemic. Government’s signal to raise GHS22.35 billion in the first quarter of 2021 to finance its developmental project coupled with the safety of the money market to risk adverse investors also contributed the stability in the of the market.

Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %)
Year 2017 2018 2019 2020 2021
GSE-CI 52.73 -0.29 -12.25 -13.98 4.41
GSE-FSI 49.51 -6.79 -6.23 -11.73 4.41

The Accra Bourse witnessed another positive closure, the fourth straight weekly gain in the new year, supported by anticipation of a rebound in economic activities which buoyed risk appetite of investors. At the close of the week’s trading, the GSE Composite Index thus made a week-on-week gain of 1.24 percent as the index rose to 2,027.12 points, representing a year-to-date return of 4.41 percent. The GSE Financial Stocks Index similarly upped by 2.48 percent after rising to an index level of 1,861.45 points, representing a year-to-date return of 4.41 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 6.39 1.75 -72.69
Total Value Traded (GHS M) 9.05 1.21 -86.68
Market Cap (GHS M) 55,073.04 55,332.99 0.47

The week’s trading realized a total of 1.75 million shares valued at GHS1.21 million. This represents 72.69 percent decline from the previous week’s decline of 6.39 million shares worth GHS9.05 million. MTN Ghana Ltd,once again, dominated the week’s trading activities with 93.45 percent share of the total traded volume. At the end of the week’s trade, Market Capitalization, however, climbed further by 0.47 percent to GHS55,332.99 million.

Stock Price Movements

A total of two (2) equities appeared on the movers’ chart with no laggard recorded on the bourse. Standard Chartered Bank Ltd led the bulls’ run with a price uplift of GHS1.65 to trade at GHS18.15 per share. CAL Bank Ltd also saw 6 pesewas gains to trade at 75 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
CAL 0.69 0.69 0.75 0.06 8.70
SCB 16.31 16.50 18.15 1.65 11.28

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.7575 5.7633 CAD 4.5160 4.5203
GBP 7.8953 7.9038 CFA 93.7577 93.8489
EUR 6.9895 6.9963 JPY 0.0550 0.0550
AUD 4.4229 4.4285 ZAR 0.3829 0.3833
NGN 68.3025 68.3512 CNY 0.8961 0.8969
Source: Bank of Ghana 29.01.2021

The interbank currency market ended with the Ghana cedi staging a strong rebound against the US dollar whiles trading mixed against the other major trading currencies. The US dollar tumbled as the US economy posted one of the worst performances since 1946 following the harsh impact of the COVID-19 pandemic on its economic activities. The US economy posted an annual contraction of 3.5 percent in 2020 after recording a 4 percent contraction in the 4th quarter of 2020 as a resurgence of virus cases prompted a fresh pullback in activity. The US dollar thus depreciated by 0.02 percent to trade at GHS5.76. The cedi thus nullified all the year-to-date depreciation against the US dollar.

The British Pound lost its shine following downbeat data suggesting a deep cut of the COVID-19 pandemic on various sectors of the UK economy. Data released in the trading week saw a shrinking UK’s labour market as unemployment rate for the month of November rose by 5.6 percent from a previous rate of 5.0 percent. UK’s manufacturing sector also saw a decline as newly built cars for 2020 dropped to its lowest since 1984 by about 33.33 percent to 920,928 vehicles. The British pound thus appreciated by 0.30 percent as its selling price rose to GHS7.90 last Friday, leaving the cedi with a year-to-date depreciation of 0.32 percent.

The Euro slumped on the international forex market as investors expressed worries over Italy’s political uncertainties and the lacklustre pace in rolling out vaccines to mitigate the spread of the virus. The Euro’s decline was further weighed by bearish assessment in the extent of economic recovery in the bloc following recent downward revisions to growth forecast made by Germany – the largest economy within the bloc. Germany, in the week under review, further downgraded its 2021 outlook, taking the COVID-19 pandemic into account, after targeting 4.5 percent earlier. Growth is anticipated to be at 3 percent, a 150-basis point reduction, by close of 2021. This affected the currency’s outturn on the international currency market but appreciated by 0.33 percent at a selling price of GHS7.00. The year-to-date appreciation of the cedi thus reduced to 1.02 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,841.47 3,714.24 -3.31 -1.11
DJIA 30,996.98 29,982.62 -3.27 -2.04
FTSE 100 6,695.07 6,407.46 -4.30 -0.82
NIKKEI 225 28,631.45 27,663.39 -3.38 0.80
FTSE/JSEAllShare 63,987.92 62,472.10 -2.37 5.16
NSE All Share 41,001.99 42,412.66 3.44 5.32
Nairobi All Share 154.84 155.59 0.48 2.29

The US Stock Market posted its biggest decline in four months following investors’ disappointment in the effectiveness of the newly developed vaccine in the US by the Johnson & Johnson firm. The drug only showed 72 percent effectiveness in preventing COVID-19 in the United States and 66 percent effective globally. This came as a disappointment as it fell significantly below Pfizer’s Vaccine which has 95 percent effectiveness, leaving the impression of a much longer hibernation and slow pace in rebound in economic activities. The S&P 500 thus recorded a weekly decline of 3.31 percent to settle at 3,714.24 points. The Dow Jones Industrial Average, similarly, posted a week-on-week decline of 3.27 percent as it settled at 29,982.62 points.

The London Stock Exchange slumped after the week’s trade as investors worried over the pace of economic recovery in the UK following the slow administration of the vaccine and negative reactions towards the newly developed vaccine by Johnson & Johnson. The FTSE 100 thus posted a weekly decline of 4.30 to settle at 6,407.46 points.

The Japanese Stock Exchange posted a decline following selling pressures on stocks within the Paper & Pulp, Railway & Bus and Real Estate sectors as investors reacted to the ill-sentiments towards the COVID-19 vaccine clinical trial results. The Nikkei 225 thus went down by 3.38 percent to settle at 27,663.39 points.

On the African equity market, the Nigerian All Share Index finished with a weekly gain of 3.44 percent as it settled at 42,412.66 points. The Nairobi All Share Index also upped by 0.48 percent to close at 155.59 points. The Johannesburg All Shares Index, however, went down by 2.37 percent to settle at 62,472.10 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 55.41 55.39 -0.04 6.93
Gold $/ounce 1,856.20 1,859.40 0.17 -1.88
Cocoa$/metric tonne 2,529.00 2,521.50 -0.30 -3.13
Coffee $/pound 1.2405 1.2433 0.23 -3.06
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil lost marginally as demand concerns resulting from the negative impact of the new variants of the coronavirus pandemic, amidst the slowness in the rollouts of vaccines, offset recent efforts to stabilise the market through a supply initiative by the Saudi Arabia. Saudi Arabia set an output cut of 1 million barrels per day in February and March to support recent efforts by OPEC to stabilise the oil market. Brent crude oil thus shed 2 cents to trade at $55.39 per barrel.

Gold slightly advanced as investor flew to safety after the release of US GDP data for 2020 which contracted by 3.5 percent, the worst performance since 1946, after the second World War. Gold thus added $3.20 to trade at $1,859.40 per ounce.

Coffee advanced marginally despite a potential slump in global supply of the soft crop on the global commodities market. According to the Vietnam National Coffee Association, coffee production is expected to drop by 10 to 15 percent in 2021 on account of natural disasters and lower investment, hence, to affect the availability of the crop on the market. This however, failed to boost the price of the crop as demand side was also affected by the COVID-19 restrictions. Coffee thus witnessed 0.23 percent appreciation to trade at $1.24 per pound.

Cocoa trimmed its value on account of dwindling demand side of the market amidst oversupply concerns in the global market as production rises in Ivory Coast. Global chocolate confectionery sales dropped by 1.2 percent between September and November 2020, following threats on the COVID-19 on economic activities. Cocoa thus went down by $7.50 to trade at $2,521.50 per metric tonne.

Note: The data in this publication is Friday on Friday (w/w)